Help Our UAL Friends

("Robert M. Gary" wrote)
[snip]
Maybe you should point the finger at the unions that created an
unrealistic pension to
begin with and didn't allow changes to the program as discount airlines
ate their shorts.


Discount airlines ate their shorts because of bad management decisions not
related to pension costs.

Shall we also talk about "unrealistic" management compensation packages?


Montblack

What bad management decisions? Airline management has about three basic
decisions - planes to fly, routes to fly, and how much to pay their
employees. The legacy carriers are paying about 2 cents per seat per
mile more for labor than the discount airlines. Some of that difference
is pension costs.

"Montblack" wrote in message
...
("Robert M. Gary" wrote)
[snip]
Maybe you should point the finger at the unions that created an
unrealistic pension to
begin with and didn't allow changes to the program as discount
airlines ate their shorts.


Discount airlines ate their shorts because of bad management decisions
not related to pension costs.

Shall we also talk about "unrealistic" management compensation
packages?


Montblack

("sfb" wrote)
What bad management decisions? Airline management has about three basic
decisions - planes to fly, routes to fly, and how much to pay their
employees. The legacy carriers are paying about 2 cents per seat per mile
more for labor than the discount airlines. Some of that difference is
pension costs.


Is this out of 37 cents per seat mile or 5 cents per seat mile? Curious.

Is it 3% more or 28% more?

To the larger point: Management, itself, is one of those "basic" decisions -
what type of management will we be? It snowballs from there...

Pension funds, fuel prices, gate fees, lawsuits, rising interest rates,
health care costs, advertising, weather on the east coast g, changing
travel habits, Internet integration, oil hedge funds, stock prices, logos
....I'd say (a good) management had better be able to juggle them ALL.

Heck, I can juggle just three balls at once.


Montblack

Discount airlines ate their shorts because of bad management decisions not
related to pension costs

I'm not sure what your point is. The airline couldn't compete against
the discouts, the reason makes no difference. If management is good,
employees don't mind enjoying the benefits of that, if management is
bad you have to accept it. Remeber that the purpose of a company IS NOT
to provide employement to people. People work for a company for as long
as it benefits the company. If you don't like that, seek out a
socialist place to lay your head.


BTW: The reason UAL filed bankruptcy was to avoid having to make their
next massive payment to the pension fund. No one would argue that
without the pension/benefits program of an "old school" airline UAL
woudln't be in the situation it is in now.
-Robert

"Robert M. Gary" wrote in message
oups.com...
Discount airlines ate their shorts because of bad management decisions
not
related to pension costs

I'm not sure what your point is. The airline couldn't compete against
the discouts, the reason makes no difference. If management is good,
employees don't mind enjoying the benefits of that, if management is
bad you have to accept it. Remeber that the purpose of a company IS NOT
to provide employement to people. People work for a company for as long
as it benefits the company. If you don't like that, seek out a
socialist place to lay your head.

People forget the only reason a company is in business is to make money. The
only reason they hire someone is so they can make money for the company. If
your not needed your gone, if they don't get rid of you eventfully you will
get rid of the company.
If the company stock is traded publicly the only real concern is that it
makes the stock holders money.

BTW: The reason UAL filed bankruptcy was to avoid having to make their
next massive payment to the pension fund. No one would argue that
without the pension/benefits program of an "old school" airline UAL
woudln't be in the situation it is in now.
-Robert

The only reason they hire someone is so they can make money for the company. If
your not needed your gone, if they don't get rid of you eventfully you will
get rid of the company.

It's such a beautiful law of nature. However, unions alter it and can
only result in a less than perfect outcome. Companies make money by
retaining (i.e. compensating) the best people and getting rid of the
dead weight. Unions are the equalizers and prevent the best employees
from getting their share so the dead weight can be carried. When they
increase the pay above what the company needs to pay to get the people
they need, they create a shortage of employment (i.e. a surplus of
applicants). So you have people who want to work for the company but
can't because there is a waiting list and the normal supply/demand of
the employment market have been broken.

-Robert

"Robert M. Gary" wrote in message
oups.com...
Discount airlines ate their shorts because of bad management decisions
not
related to pension costs

I'm not sure what your point is. The airline couldn't compete against
the discouts, the reason makes no difference.

The reason makes all the difference: in short, their level and quality of
service was not all that far removed from the discount carriers.

They could not compete PERIOD. Their management was trained and brought up
in the world a heavy regulation and was thus completely out of the water on
running a competitive enterprise.

Recall, too, that several discount carriers didn't survive either (People
Express, etc).


--
Matt
---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

Matt Barrow wrote:

They could not compete PERIOD. Their management was trained and brought up
in the world a heavy regulation and was thus completely out of the water on
running a competitive enterprise.

I think you've hit the main reason. As they grow, companies develop a "corporate
culture" caused by the fact that existing managers tend to promote people who do
things the same way they do. As time goes on, this "culture" may get out of
touch with reality. About the only thing that will change it is a hostile takeover.

I saw this in action at my former place of employ. The company started out
developing projects on a "cost-plus" basis, with money being fronted in advance.
They were put up for sale about 15 years ago and were supposed to develop
competitive practices, but they're still struggling with that. The old "who's
going to fund this" attitude continued to work with their new owner for long
enough that they never got out of it.

They have another new owner now. The CEO just got handed his walking papers.
There's still a little hope.

George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.

Shall we also talk about "unrealistic" management compensation packages?

Who cares? The owners of the company (elected board of directors)
decided what was necessary to pay the execs. Its not like there are
execs out there waiting to be hired. Execs that can run a large company
are like NFL quarterbacks. There aren't many of them and they demand a
high package or they'll just go somewhere else. The owners of the
company have to decide how much they are willing to pay them. What the
owners decided to pay their execs is none of the employees business.
The purpose of the company is to return value to shareholders (owners)
**NOT** to provide employement. If you don't like it, there are still
some communist countries out there for you to choose from.

-Robert

In article .com,
"Robert M. Gary" wrote:

Shall we also talk about "unrealistic" management compensation packages?

Who cares? The owners of the company (elected board of directors)
decided what was necessary to pay the execs. Its not like there are
execs out there waiting to be hired. Execs that can run a large company
are like NFL quarterbacks. There aren't many of them and they demand a
high package or they'll just go somewhere else. The owners of the
company have to decide how much they are willing to pay them. What the
owners decided to pay their execs is none of the employees business.
The purpose of the company is to return value to shareholders (owners)
**NOT** to provide employement. If you don't like it, there are still
some communist countries out there for you to choose from.

-Robert

I'm not so sure that execs are that rare -- so many of them screw up so
many times and, then go off to other companies and ruin them, too.

The boards of directors appear to have an incestuous relationship with
each other and with other companies, allowing the above phenomenon.

Case in point: TWA cancelled the NY-Frankfort run because "the load
factor showed no increase." Fact is, the load factor was 100% and could
not increase!

What company needs 17 levels of vice president, including "vice
president of wines and cheeses?"